Bill, I suspect you are right that Superior will need to indemnify Hartford for any fines. However, it is less likely that Hartford will be able to squeeze money out of Superior for reputational damages they suffer.
I strongly believe that Mr Garamendi chose to pursue Hartford rather than the guilty little guy because it gets his name in the news. Hartford\’s guilt is no more than guilt by association. Even if they knew what Superior was doing, the party choosing to charge the fee was Superior. To liken this to an insurance loss, Superior was the \”proximate cause\”.
The DOI has taken no action against Superior Access because it has done nothing illegal. Broker fees charged by appointed agents for commercial lines are legal by California insurance regulations(Title10 California Code of Regulations 2189).
Broker fees charged by appointed agents might be includable in a carrier\’s rate filing only if it is required to be paid by the insured as part of the insured\’s total cost of the policy.
Superior Access has never charged insureds a fee.
The Insurance Industry better take a stand for their income NOW! These elected officials (Morons) are using our income to get them to the next rung on the ladder (Garamendi is trying for Governship AGAIN!). Garamendi, Spitzer are targeting our income and our livelyhoods it is time the Insurance Industry stop cowaring in the corner and stand up for themselves. There is NOTHING wrong with insurance agents, brokers and carriers making money and it is not the government business how much we make(they always get their chunk from my taxes). Last time I check the USA was still a capitalist society!!
The Insurance Industry better take a stand for their income NOW! These elected officials (Morons) are using our income to get them to the next rung on the ladder (Garamendi is trying for Governship AGAIN!). Garamendi, Spitzer are targeting our income and our livelyhoods it is time the Insurance Industry stop cowaring in the corner and stand up for themselves. There is NOTHING wrong with insurance agents, brokers and carriers making money and it is not the government business how much we make(they always get their chunk from my taxes). Last time I check the USA was still a capitalist society!!
10 CCR 2189.1 is the regulation regarding brokers fees. It applies on to peronal auto (Ins c 660) and residences with 4 or less dwellings(ins c 675). The regulation specifically excludes \”a wholesale intermendiary who in a particular transaction did NOT negotiate directly with the consumer, proved that the wholesale intermediary discloses its fees in writing to the retail broker\”.
\”Wholesale intermediary\” is defined (10ccr 2189.2(d))as a broker-agent that negotiates an insurance contract with a retail broker-agent, but not with a consumer. Unless NAIS was not segregating and identifying the fees as separate from the premium, how can DOI now claim that the fees are includable in the premium? Does anybody know what NAIS was disclosing to the retail broker (and whether the retailer was disclosing the fee to the insured, if that fee was being passed on to the insured)? It\’s difficult to apply the law when the facts are in dispute.
Broker fees are legal, whether charged by an appointed agent or a broker and whether charged directly to an insured or by a wholesaler to the retailer, and whether charged on personal lines or commercial lines (10CCR2189) is illegal and could be invalidated in a declaratory relief action under Govt Code 11350.
The issue is not the legality of broker fees, but whether broker fees are imputed to the carrier as part of premium for rate-setting purposes and premium tax purposes. The DOI has already accepted their legality.
A further question is whether the DOI is using a proper procedure and, if so, what is the remedy?
A broker fee is a fee charged to a customer/insured. If one is assumed to be acting as an insurance \”agent\” (representing the insurer),per Ins C 1731, (having a filed notice of agency appointment on file with CDI) then in order to charge a fee to the customer, the producer can only charge a broker fee if (a) the dual agency is disclosed to both customer and insured and both consent to it preferably in writing), and (b) the customer specifically agrees to the brokers fee. If the customer has not agreed to the fee, then the money collected is assumed by law to be collected by the producer on behalf of the insurer and is, therefore, part of the taxable premium. It also would be in excess of the filed rates for that coverage, violating the rating laws.
Where do you get the idea that 10CCR 2189 is \”illegal\”? Do you mean unconstitutional? Why?
re: insurance agent lawyer, 4/28/06:
Only the legislature may set policy. It may delegate to an administrative agency the power to enact regs to implement that policy.
10CCR2189et.seq. was enacted through CIC790.10, the enabling statute, and based on 790.03(b), false advertising. Thus, the regs are valid to the extent they pertain to disclosure of fees, but invalid to the extent they outlaw fees charged by personal lines appointed agents.
CIC1731 is irrelevant because those regs implicitly authorize fees charged by appointed agents for commercial lines.
The DOI has not contended that broker fees are illegal for the producer to charge under any case, statute, or reg. The DOI contends that fees charged by appointed agents are part of the premium for tax and rate-filing purposes because they are part of the cost of the benefit of insurance to the insured and because the carrier has delegated to the agent the power to bind evidenced by the agency appointment(CIC1704, 1731).
If the carrier has total control over the agent as with Allstate, then the assertion has some substance. If the carrier has no control over the agent, especially re binding authority, then the assertion fails.
I have a complaint. I know that these employees get compensated for not paying claims. I am due money according to their own written policies and they are refusing to pay me. I had to go back to work early from a surgery before I was fully recoved. I went to the complaint department. Do you know that the employees that I spoke with did not know that they did not have written policies
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Bill, I suspect you are right that Superior will need to indemnify Hartford for any fines. However, it is less likely that Hartford will be able to squeeze money out of Superior for reputational damages they suffer.
I strongly believe that Mr Garamendi chose to pursue Hartford rather than the guilty little guy because it gets his name in the news. Hartford\’s guilt is no more than guilt by association. Even if they knew what Superior was doing, the party choosing to charge the fee was Superior. To liken this to an insurance loss, Superior was the \”proximate cause\”.
The DOI has taken no action against Superior Access because it has done nothing illegal. Broker fees charged by appointed agents for commercial lines are legal by California insurance regulations(Title10 California Code of Regulations 2189).
Broker fees charged by appointed agents might be includable in a carrier\’s rate filing only if it is required to be paid by the insured as part of the insured\’s total cost of the policy.
Superior Access has never charged insureds a fee.
The Insurance Industry better take a stand for their income NOW! These elected officials (Morons) are using our income to get them to the next rung on the ladder (Garamendi is trying for Governship AGAIN!). Garamendi, Spitzer are targeting our income and our livelyhoods it is time the Insurance Industry stop cowaring in the corner and stand up for themselves. There is NOTHING wrong with insurance agents, brokers and carriers making money and it is not the government business how much we make(they always get their chunk from my taxes). Last time I check the USA was still a capitalist society!!
The Insurance Industry better take a stand for their income NOW! These elected officials (Morons) are using our income to get them to the next rung on the ladder (Garamendi is trying for Governship AGAIN!). Garamendi, Spitzer are targeting our income and our livelyhoods it is time the Insurance Industry stop cowaring in the corner and stand up for themselves. There is NOTHING wrong with insurance agents, brokers and carriers making money and it is not the government business how much we make(they always get their chunk from my taxes). Last time I check the USA was still a capitalist society!!
10 CCR 2189.1 is the regulation regarding brokers fees. It applies on to peronal auto (Ins c 660) and residences with 4 or less dwellings(ins c 675). The regulation specifically excludes \”a wholesale intermendiary who in a particular transaction did NOT negotiate directly with the consumer, proved that the wholesale intermediary discloses its fees in writing to the retail broker\”.
\”Wholesale intermediary\” is defined (10ccr 2189.2(d))as a broker-agent that negotiates an insurance contract with a retail broker-agent, but not with a consumer. Unless NAIS was not segregating and identifying the fees as separate from the premium, how can DOI now claim that the fees are includable in the premium? Does anybody know what NAIS was disclosing to the retail broker (and whether the retailer was disclosing the fee to the insured, if that fee was being passed on to the insured)? It\’s difficult to apply the law when the facts are in dispute.
Broker fees are legal, whether charged by an appointed agent or a broker and whether charged directly to an insured or by a wholesaler to the retailer, and whether charged on personal lines or commercial lines (10CCR2189) is illegal and could be invalidated in a declaratory relief action under Govt Code 11350.
The issue is not the legality of broker fees, but whether broker fees are imputed to the carrier as part of premium for rate-setting purposes and premium tax purposes. The DOI has already accepted their legality.
A further question is whether the DOI is using a proper procedure and, if so, what is the remedy?
A broker fee is a fee charged to a customer/insured. If one is assumed to be acting as an insurance \”agent\” (representing the insurer),per Ins C 1731, (having a filed notice of agency appointment on file with CDI) then in order to charge a fee to the customer, the producer can only charge a broker fee if (a) the dual agency is disclosed to both customer and insured and both consent to it preferably in writing), and (b) the customer specifically agrees to the brokers fee. If the customer has not agreed to the fee, then the money collected is assumed by law to be collected by the producer on behalf of the insurer and is, therefore, part of the taxable premium. It also would be in excess of the filed rates for that coverage, violating the rating laws.
Where do you get the idea that 10CCR 2189 is \”illegal\”? Do you mean unconstitutional? Why?
re: insurance agent lawyer, 4/28/06:
Only the legislature may set policy. It may delegate to an administrative agency the power to enact regs to implement that policy.
10CCR2189et.seq. was enacted through CIC790.10, the enabling statute, and based on 790.03(b), false advertising. Thus, the regs are valid to the extent they pertain to disclosure of fees, but invalid to the extent they outlaw fees charged by personal lines appointed agents.
CIC1731 is irrelevant because those regs implicitly authorize fees charged by appointed agents for commercial lines.
The DOI has not contended that broker fees are illegal for the producer to charge under any case, statute, or reg. The DOI contends that fees charged by appointed agents are part of the premium for tax and rate-filing purposes because they are part of the cost of the benefit of insurance to the insured and because the carrier has delegated to the agent the power to bind evidenced by the agency appointment(CIC1704, 1731).
If the carrier has total control over the agent as with Allstate, then the assertion has some substance. If the carrier has no control over the agent, especially re binding authority, then the assertion fails.
I have a complaint. I know that these employees get compensated for not paying claims. I am due money according to their own written policies and they are refusing to pay me. I had to go back to work early from a surgery before I was fully recoved. I went to the complaint department. Do you know that the employees that I spoke with did not know that they did not have written policies